State Medicaid offices target dead people's homes to recoup their health care costs

[marybourg]

34. And you will not get the step up in the cost basis of the house

that occurs when one inherits a house, so that when the house is sold you and bro will owe capitol gains tax on the difference between what Mom paid for the house and what you sell it for, nor, unless you both go live in the house for a few years will you get the $250,000 Capitol gain exemption that a person who owned and lived in a house for several years gets when selling the house. So by neither validly selling nor bequeathing the house to your brother and you, your Mom left a lot on the table by this maneuver. Not to mention the gift tax return that should have been filed for this gift of the actual value of the house minus $500.